The Applicable Law to the Merits in International Arbitration and the Role of the Seat: Hardship, force majeure, and frustration
The idea that arbitrators would be bound by the law of the seat with respect to the merits of the case is no longer prevailing in international arbitration. For the past few decades, it has been well settled that international arbitrators have no lex fori and, within an autonomous conflict rules standpoint, enjoy relative discretion to determine the applicable law (respecting parties’ choice, if any) and finally decide on the merits of the arbitration, with fewer restrictions or limitations than courts. In the era after the COVID-10 pandemic, topics relating to the law applicable to the merits pose new challenges with respect to some specific legal grounds, such as hardship, force majeure, and frustration used to justify non-compliance with contractual obligations. More than ever, the parties’ choice and arbitrators’ determination of the applicable law to the merits will play a major role in defining the outcome of the dispute, as national laws differ significantly on such topics. The requirements and thresholds to avoid a specific obligation or even the contract in its entirety under such legal grounds are rather different depending on the applicable law. Absent parties’ choice, the arbitrators’ determination of the applicable law will also play a major role in determining the outcome of the arbitration. This panel will provide an overview on these new challenges and try to tackle some of the questions that may arise.
• Franco Ferrari, NYU Law
• Giuditta Cordero-Moss, University of Oslo
• Andre Abbud, FGV, BMA, São Paulo
• Niccolò Landi, Studio Legale Landi in association with BeecheyArbitration
• Marco Torsello, Verona University, Studio Legale ARBLIT